The Microstructure of Housing Markets

Han, Liang; Strange, William C.

doi:10.1016/b978-0-444-59531-7.00013-2

Cited by 90 publications

(31 citation statements)

References 139 publications

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“…The simplest model assumes a posted price that a buyer either accepts or rejects and the search for a buyer continues; however, this ignores the possibility that the seller will negotiate from the initial offering price. The market clears on both time and price as sellers offering and accepting a lower price also experience a shorter TOM (Han & Strange, 2015). In this vein, Cubbin (1974) models an individual house seller search model in which the difference between the actual and expected price for a house based on its characteristics is termed the quality adjusted price.…”

Section: Theory and Previous Researchmentioning

confidence: 99%

Time-on-Market in Chinese Condominium Presales

Zhou

Zahirovic‐Herbert

Gibler

2018

International Journal of Strategic Property Management

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The condominium presale market is characterized by information asymmetry between the developer and potential buyers. A condominium developer faces conflicting incentives to sell units quickly at a lower price to generate cash and sales momentum versus to hold prices high and endure longer marketing time to maximize revenues and maintain the property’s value. We examine the pattern of marketing duration for condominium units offered for presale in a large homogeneous development in Chengdu, China using a Cox proportional hazards model. Results indicate that a patient developer may extract a price premium on units. Diminishing risk to buyers is associated with shorter marketing duration. Time-on-market is also influenced by unit and building size as well as orientation. Market conditions may moderate the speed at which units are sold.

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Section: Theory and Previous Researchmentioning

confidence: 99%

Time-on-Market in Chinese Condominium Presales

Zhou

Zahirovic‐Herbert

Gibler

2018

International Journal of Strategic Property Management

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“…The first literature studies implications of the fixed percentage commissions in the real estate brokerage industry (such as, Levitt and Syverson (2008), Hsieh and Moretti (2003), Hendel et al (2009), and Han and Hong (2011). See Han and Strange (2015) for a review). 5 None of these papers analyzes the direct consequences of the commission compensation structure, which is our focus in this paper.…”

Section: Introductionmentioning

confidence: 99%

Conflicts of Interest and the Realtor Commission Puzzle

Barwick

Pathak

Wong

2015

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This paper documents uniformity in real estate commission rates across markets and time using a dataset on realtor commissions for 653,475 residential listings in eastern Massachusetts from 1998-2011. Newly established real estate brokerage offices charging low commissions grow more slowly than comparable entrants with higher commissions. Properties listed with lower commission rates experience less favorable transaction outcomes: they are 5% less likely to sell and take 12% longer to sell. These adverse outcomes reflect decreased willingness of buyers' agents to intermediate low commission properties (steering) rather than heterogeneous seller preferences or reduced effort of listing agents. While all agents and offices prefer properties with high commissions, firms and agents with large market shares purchase a disproportionately small fraction of low commission properties. The negative outcomes for low commissions provide empirical support for regulatory concerns that steering reinforces the uniformity of commissions.

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“…Yet, it remains a widely-held belief that real estate brokers possess a high degree of specialized market knowledge that can act to offset informational disadvantages faced by either party, when represented. As Han and Strange [11] point out: "Quite naturally, the value of real estate brokers should be particularly large for unsophisticated buyers and sellers with limited knowledge and experience of housing markets".…”

Section: B) Brokerage Intermediation In Real Estate Marketsmentioning

confidence: 99%

The Information and Bargaining Roles of Commercial Brokers When Investors Are Uninformed

Wiley¹,

Liu²,

Guo³

et al. 2019

TEL

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Market outcomes are contrasted for uninformed investors with and without broker representation to evaluate the information role, and for parties opposing the uninformed (with and without representation) to evaluate the bargaining role. The setting is a sample of 17,000 office building transactions in more than 100 US markets, and the identification strategy for uninformed investors is based on the nonlocal clientele effect. Nonlocal investors buy high and sell low, paying significant premiums in acquisitions and accepting discounted offers in divestitures. Employing a commercial broker is found to have virtually zero impact on this disparity. Moreover, when the opposite party has broker representation, the degree of overpayment by nonlocal buyers is even higher. These findings are at odds with the conventional notion that brokers possess a high degree of specialized market knowledge which can be used to offset informational disadvantages suffered by their clients.

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The Microstructure of Housing Markets

Cited by 90 publications

References 139 publications

Time-on-Market in Chinese Condominium Presales

Time-on-Market in Chinese Condominium Presales

Conflicts of Interest and the Realtor Commission Puzzle

The Information and Bargaining Roles of Commercial Brokers When Investors Are Uninformed

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